Should tax dollars be spent on FEMA or federal flood insurance for rebuilding homes?

Displaced Bama Fan · Sep 13, 2017

As you know, we just went through Harvey. Fortunately, we weren't affected but many friends were. My question to you, is if we know areas are susceptible to hurricanes, flooding, etc. should federal money be spent to assist in rebuilding especially if the probability is fair that the area will be impacted in the relatively near future?

What about on barrier islands such as Galveston, Orange Beach, Navarre Beach, the Keys, etc.?

If you knowingly buy a house near a river, bayou or reservoir, should you be able to purchase flood insurance that's deep discounted by the federal government knowing that the taxpayers are going to take a loss for every flooded home?

What say you?

Bamaro · Sep 13, 2017

There are very many "it depends"

Displaced Bama Fan · Sep 13, 2017

Bamaro said:
There are very many "it depends"

Absolutely. Pick one and let's discuss. I'm not saying yeah or nay to anything but I get to the point where I start mumbling "the definition of insanity..."

Displaced Bama Fan · Sep 13, 2017

And better yet, would the money be better spent on preventative measures instead of reactive ones? Let's take Houston. Should we do more to curtail flooding from the bayous and improve the run off & reservoir structures instead and prevent future what I'll call "bailout money" to rebuild people's homes?

Do we need to change the building code, have stricter zoning rules/laws as it pertains to flood/wind/etc.?

cbi1972 · Sep 13, 2017

Most people are unable or unwilling to pay for a fortress that can withstand natural disasters or live in a tarpaper shack that is easily replaced, but are all too glad to have someone else assume the risk involved.

CajunCrimson · Sep 13, 2017

FEMA is government
Flood Insurance is private

One spends the people's money
The other takes it....

I tend to usually lean toward the private sector.....because of the huge amounts of waste in Government.

But, this is really like choosing between Auburn and Tennessee

Some land simply wasn't meant to be lived on....

Displaced Bama Fan · Sep 13, 2017

CajunCrimson said:
FEMA is government
Flood Insurance is private

One spends the people's money
The other takes it....

I tend to usually lean toward the private sector.....because of the huge amounts of waste in Government.

But, this is really like choosing between Auburn and Tennessee

Some land simply wasn't meant to be lived on....

I don't think so.

https://www.fema.gov/national-flood-insurance-program

bamachile · Sep 13, 2017

Displaced Bama Fan said:
As you know, we just went through Harvey. Fortunately, we weren't affected but many friends were. My question to you, is if we know areas are susceptible to hurricanes, flooding, etc. should federal money be spent to assist in rebuilding especially if the probability is fair that the area will be impacted in the relatively near future?

What about on barrier islands such as Galveston, Orange Beach, Navarre Beach, the Keys, etc.?

If you knowingly buy a house near a river, bayou or reservoir, should you be able to purchase flood insurance that's deep discounted by the federal government knowing that the taxpayers are going to take a loss for every flooded home?

What say you?

I am pretty much Libertarian, so the bold type tells all.

chanson78 · Sep 13, 2017

Having never gone through a flood or hurricane event, I can only go by what I read.
From this article on USA Today:

USA Today said:
“There’s going to be a huge uninsured economic loss here,” said Pete Mills, a senior vice president at the Mortgage Bankers Association.About 1.2 million properties in the Houston-Sugarland-Baytown area are at high/moderate risk of flooding but are not in a designated flood zone requiring insurance, research firm CoreLogic estimates. That’s roughly half of all properties — residential and commercial — in that area.Hunter of the CFA said that homeowners without flood insurance can possibly apply for federal disaster relief benefits, but those come in the form of low interest loans, a burden for those already struggling with too much debt.“If you have $30,000 in damages, you can get maybe $25,000,” Hunter said. “But there will be interest, and then you have your mortgage. You’ll have two loans on your house.”Homeowners with water damage can get paid through their homeowners insurance but only if wind blows out a window or sends a roof aloft first, allowing the water in. If the water rushes through the floorboard or walls, you’re not covered.

So I guess the first thing to talk about would be defining the argument. What exactly do you mean by "My question to you, is if we know areas are susceptible to hurricanes, flooding, etc. should federal money be spent to assist in rebuilding especially if the probability is fair that the area will be impacted in the relatively near future?"

Are you referring only to the National Flood Insurance Program? Or FEMA money allocated after declaring a locality a disaster area.

To answer your last question, I think that there needs to be significant changes to premiums. The National Flood Insurance Program was made with the goal of helping people attain policies, as private insurance companies quit making flood insurance part of the homeowners insurance policies. This left a gap and the government started the program. They have attempted to adjust premiums twice in the past 6 years. In 2012 the Biggert–Waters Flood Insurance Reform Act of 2012 attempted to change premiums, however that was delayed by Homeowner Flood Insurance Affordability Act of 2014 (S. 1926; 113th Congress). I do think that it is interesting according to this article that the program disproportionately benefits wealthier americans.

Politico said:
Who benefits from flood insurance? People in flood-prone states like Louisiana and Florida, of course. But many beneficiaries also share another characteristic: they are upper income. Evidence suggests that recipients of flood insurance are on average wealthier than the typical homeowner. A Congressional Budget Office study found the median value of an NFIP insured home is about twice that of American homes in general. About 80 percent of NFIP households are in counties that rank in the top income quintile. As of 2012, 42 percent of NFIP properties took out the maximum $250,000 in coverage, reflecting the fact that properties near water tend to be more expensive than properties in general.

Wealthier households also tend to receive larger subsidies. A University of Massachusetts study examined the relationship between property values and premiums paid per $100,000 in coverage in that state, finding a negative relationship between property value and premium cost. For example, homeowners on Martha’s Vineyard pay an average premium of $400 per $100,000, while residents of Fairhaven, a blue-collar town with a median household income of about $40,000, pay over $800. These numbers reflect the impact of the NFIP’s explicit subsidies to homes built before the first Federal Emergency Management Agency flood map of a given area, which constitute 15-20 percent of the total policies in the program. Policyholders receive a 60-65 percent discount for these properties.

Displaced Bama Fan · Sep 13, 2017

chanson78 said:
Having never gone through a flood or hurricane event, I can only go by what I read.
From this article on USA Today:

So I guess the first thing to talk about would be defining the argument. What exactly do you mean by "My question to you, is if we know areas are susceptible to hurricanes, flooding, etc. should federal money be spent to assist in rebuilding especially if the probability is fair that the area will be impacted in the relatively near future?"

Are you referring only to the National Flood Insurance Program? Or FEMA money allocated after declaring a locality a disaster area.

To answer your last question, I think that there needs to be significant changes to premiums. The National Flood Insurance Program was made with the goal of helping people attain policies, as private insurance companies quit making flood insurance part of the homeowners insurance policies. This left a gap and the government started the program. They have attempted to adjust premiums twice in the past 6 years. In 2012 the Biggert–Waters Flood Insurance Reform Act of 2012 attempted to change premiums, however that was delayed by Homeowner Flood Insurance Affordability Act of 2014 (S. 1926; 113th Congress). I do think that it is interesting according to this article that the program disproportionately benefits wealthier americans.

I'm referring to both FEMA allocating money and the National Flood Insurance Program. So my first question is:

Should FEMA help homeowners rebuild in flood or storm (hurricane/tropical storm) prone areas? Is it feasible to do so?

Secondly, At what point do we say enough is enough, the taxpayers can't keep bailing people out of these issues can they?

Granted, I realize we spend money like it's growing on trees and create more money out of thin air. What's another $250B in debt?

I agree with you that flood insurance premiums need to be increased. I wish it was managed more like an insurance company, but we know better, unfortunately.

chanson78 · Sep 13, 2017

Displaced Bama Fan said:
I'm referring to both FEMA allocating money and the National Flood Insurance Program. So my first question is:
Should FEMA help homeowners rebuild in flood or storm (hurricane/tropical storm) prone areas? Is it feasible to do so?

It wasn't until I started digging and actually went through the process of seeing if I was eligible for assistance using answers about myself, but representing that I lived in Texas, that I realized FEMA actually will help rebuilding of someones house if they did not have flood insurance.

From this site:

FEMA Individuals and Households Program said:
Financial Housing Assistance - FEMA provides funds paid directly to eligible individuals and households and may include the following types of assistance:
• Rental Assistance: To secure temporary housing while repairs are being made to the predisaster primary residence or while transitioning to permanent housing. Rental Assistance may be used to rent a house, apartment, manufactured home, recreational vehicle, or other readily fabricated dwelling.
• Lodging Expense Reimbursement: Reimbursement for hotels, motels, or other short-term lodging while an applicant is displaced from their primary residence.
• Home Repair Assistance: To help repair an owner-occupied primary residence, utilities, and residential structure, including privately-owned access routes (driveways, roads, or bridges) to a safe and sanitary living or functioning condition.
• Home Replacement Assistance: To help homeowners replace their uninsured or underinsured primary residence, destroyed by a disaster.

I am 100% against this last provision. To a degree I am against the Home Repair Assistance provision as well, however it is likely more beneficial to the economy to get people back in "their" house rather than have them ditch their mortgage. It is entirely too amorphous and essentially negates the entire goal of the flood insurance program. It is to flood insurance the same as EMTALA is to health insurance.

The feasibility I think has already been shown by how bad the flood insurance program is in debt. I think it was 24$billion before Harvey and Irma.

Displaced Bama Fan said:
Secondly, At what point do we say enough is enough, the taxpayers can't keep bailing people out of these issues can they?

About the same time that politicians will get tired of taking wealthy people's money. This is the standard issue with government. All pork is bad pork unless it benefits me or my loved ones.

Bamaro · Sep 13, 2017

Displaced Bama Fan said:
I'm referring to both FEMA allocating money and the National Flood Insurance Program. So my first question is:

Should FEMA help homeowners rebuild in flood or storm (hurricane/tropical storm) prone areas? Is it feasible to do so?

Secondly, At what point do we say enough is enough, the taxpayers can't keep bailing people out of these issues can they?

Granted, I realize we spend money like it's growing on trees and create more money out of thin air. What's another $250B in debt?

I agree with you that flood insurance premiums need to be increased. I wish it was managed more like an insurance company, but we know better, unfortunately.

Cover a full loss once only, partial losses need to be capped. If you choose to rebuild in the same location (any new construction in same area) you do so at your own risk.
Full disclosure, I'm not saying this as someone on the outside looking in. I have a condo in OCMD that is covered by federal flood insurance.

CullmanTide · Sep 13, 2017

We need to listen to what nature is telling us. If man continues doing what he has always done things will only get worse.

MattinBama · Sep 13, 2017

In general terms I say no.

But in the status of our current situation the government is constantly stealing from us anyway and wasting the money on all sorts of things. So at least in these situations someone is getting some of it back.

If people get serious about fixing the rampant waste and stupidity then I would stand by my normal libertarian leanings. As it stands, I tend to just shrug at stuff like this now a days.

Jon · Sep 14, 2017

be hypocritical of me to say no as I currently have FEMA based flood insurance on my house at the gulf but I'd be fine with the subsidies removed and my places insurance being adjusted accordingly. My house was built in 1954 and has never flooded. The guy I bought the place from owned in since the 70's and lived down the street when it was built and according to him it has always stayed dry. Once I get rid of the mortgage I will likely drop all the insurance anyway as the land is worth far, far more than the house on it

Intl.Aperture · Sep 14, 2017

Jon said:
be hypocritical of me to say no as I currently have FEMA based flood insurance on my house at the gulf but I'd be fine with the subsidies removed and my places insurance being adjusted accordingly. My house was built in 1954 and has never flooded. The guy I bought the place from owned in since the 70's and lived down the street when it was built and according to him it has always stayed dry. Once I get rid of the mortgage I will likely drop all the insurance anyway as the land is worth far, far more than the house on it

I don't think it's hypocritical to take advantage of a Government program if it benefits you, even if you disagree with it. (within reason and outside of abuse, of course). When there was talk of offering carbon credits and granting cash to landowners who used their pines for carbon sequestration you better believe my family was ready to sign on the dotted line despite disagreeing that it was the best policy for the U.S. to adopt whole-hog.
Maybe this perception is warped and it could be called hypocritical, but I feel that the individual and the government are meant to be more adversarial than anything...and I mean that with a sporting connotation. So if the government makes a mistake I think it's silly for the individual NOT to take advantage of it (again, not exploiting maliciously, but using the rule as intended to one's benefit).

bamachile · Sep 14, 2017

Intl.Aperture said:
I don't think it's hypocritical to take advantage of a Government program if it benefits you, even if you disagree with it. (within reason and outside of abuse, of course). When there was talk of offering carbon credits and granting cash to landowners who used their pines for carbon sequestration you better believe my family was ready to sign on the dotted line despite disagreeing that it was the best policy for the U.S. to adopt whole-hog.
Maybe this perception is warped and it could be called hypocritical, but I feel that the individual and the government are meant to be more adversarial than anything...and I mean that with a sporting connotation. So if the government makes a mistake I think it's silly for the individual NOT to take advantage of it (again, not exploiting maliciously, but using the rule as intended to one's benefit).

This post is food (or fodder, if you prefer) for an entire thread by itself.

Elefantman · Sep 15, 2017

Bamaro said:
Cover a full loss once only, partial losses need to be capped. If you choose to rebuild in the same location (any new construction in same area) you do so at your own risk.
Full disclosure, I'm not saying this as someone on the outside looking in. I have a condo in OCMD that is covered by federal flood insurance.

I agree. Flood insurance should be like car insurance. If it's "totaled" the owner will receive the money but that plot of land or condo unit can never be insured again.

TIDE-HSV · Sep 15, 2017

Elefantman said:
I agree. Flood insurance should be like car insurance. If it's "totaled" the owner will receive the money but that plot of land or condo unit can never be insured again.

I think you've hit on what I've always thought was the answer. All this "100 year flood" "500 year flood" etc. has obviously become meaningless. Each hurricane which floods an area cannot any longer be treated as just an isolated incident. Now, it should be "OK, you flooded." "If you want flood insurance again, jack your house up 10' (or more). Obviously, a lot of people will find that uneconomical and will relocate. So be it...

2003TIDE · Sep 15, 2017

I'm torn. Vacation homes - no. Homes built on infilled wetlands - no. Homes near critical infrastructure like ports and military facilities though are a little different IMO.

Should tax dollars be spent on FEMA or federal flood insurance for rebuilding homes?

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